AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: The State Bank of Pakistan (SBP) announced a significant policy shift today, reducing its monetary policy rate by 50 basis points to 10.5%. The decision, revealed during a post-monetary policy statement briefing by the SBP Governor, reflects an improved inflation outlook and expectations of sustained economic recovery.
The central bank’s decision comes as inflation is projected to average within the target range of 5-7% for the period from July to November in the fiscal year 2026. However, the SBP anticipates a temporary uptick in inflation during the fourth quarter of FY26 due to base effects, with a return to the target range expected in the following fiscal year.
Core inflation, although persisting outside the desired 5-7% band, has shown signs of easing. This trend is attributed to softer global commodity prices and the SBP’s restrictive policy stance, which have collectively supported a disinflation trajectory.
In addition to inflation forecasts, the SBP addressed the impact of recent floods, noting that the economic repercussions have been materially lower compared to previous instances. Consequently, the central bank remains optimistic about achieving its GDP growth forecast for FY26.
The policy changes and economic projections were detailed by AKD Securities Limited in a briefing following the central bank’s announcement.